One in eight loan borrowers in default - Confused on ConnectED and E-rate? - More on reauthorization wish lists - What’s next for Kaplan

By Libby A. Nelson

08/06/13 06:07 AM EDT

By Libby A. Nelson

With help from Nirvi Shah

Story Continued Below

ONE IN EIGHT LOAN BORROWERS IN DEFAULT— The Consumer Financial Protection Bureau crunched the numbers, and it found enrollment in income-based repayment programs are still lagging despite significant numbers of borrowers in default. It’s the latest sign of the bureau being a watchdog of sorts for other federal agencies. The data come from the Education Department, but good enrollment numbers have been hard to come by so far for income-based repayment. The bureau’s analysis is the first easy-to-understand look at who is (and isn’t) taking advantage of income-based programs, which have been expanded and made more generous in recent years. The results: Only about 1 in 10 borrowers are enrolled, even though deferment, forbearance and default statistics suggest many more student loan borrowers could benefit. The borrowers who do sign up for plans using income-based repayment do tend to have higher debts: $45,800 on average, more than they could have borrowed for undergraduate programs alone. That means either interest has capitalized or the program is attracting borrowers with higher than average debt. Defaulting on a student loan can be financially devastating: The loans aren't dischargable in bankruptcy, and the government can go to great lengths to get its money back, garnishing wages, tax returns and even Social Security checks until it's recouped the money. Today’s story: http://politi.co/1eoGyBk

Why don’t borrowers sign up for income-based repayment? It’s a combination of confusion, lack of awareness and logistical problems. Many borrowers still don’t know the program exists, a point Obama often makes in many speeches on college campuses. Others can’t figure out how to consolidate their loans, or get stuck as loans are transferred from servicer to servicer. And there are plenty of misconceptions about the program -- many don’t realize that you’re not stuck with a longer repayment term and can repay faster if your income rises.

Bad news for FFEL: The higher defaults for Federal Family Education Loans are partially due to the fact that those loans are typically older -- none were issued after 2010, so they’ve been in repayment longer and borrowers have had more time to default. But FFEL loans are eligible for income-based programs too, and the high default rates (almost 20 percent of borrowers) illustrate either difficulties with loan servicers or the simple fact that borrowers get harder to reach the further they get from college.

HAPPY TUESDAY and welcome to Morning Education. It’s been a year today (on East Coast time, anyway) since the Curiosity rover’s dramatic early-morning landing on the surface of Mars, a moment that led to some amazing video and thousands of inevitable press releases about the importance of STEM education. Watch a year on Mars through Curiosity’s eyes, with some weird electronic dance music: http://usat.ly/1eoHLIT. And keep sending news tips, reactions and inspirational science facts to lnelson@politico.com and @ libbyanelson. As always, follow us at @ morning_edu and @ POLITICOPro.

COURT <3’s FREE SPEECH— In a ruling Monday, the U.S. Court of Appeals for the Third Circuit agreed with a lower court that banning students in a Pennsylvania school district from wearing “I (heart) Boobies (KEEP A BREAST)” bracelets would violate students’ right to free speech. The court decided the bracelets, part of a breast cancer awareness campaign, are neither lewd or vulgar, nor disruptive, the reasons for which historic court opinions have ruled students’ free speech rights can be reined in at school. The ruling: http://1.usa.gov/1eoIk5E

CONFUSED ON CONNECTEd AND E-RATE? Digital Learning Now has put together a brief with background on the program and the Obama administration’s proposal to modernize it. Its two takeaways for the future of the debate over the communications program: “First, there is a unanimous agreement that the program needs to be reformed, modernized and simplified. Second, there are no calls for ‘ending the E-Rate’ the way we have seen in the past. It is significant that the lone Republican on the FCC, Commissioner Pai, said, ‘At its core, E-Rate is a program worth fighting for’ and offered thoughtful ideas for reforming it.” The policy brief: http://bit.ly/1eoINo8

More E-rate: International Association for K-12 Online Learning (iNACOL) and the Council of Chief State School Officers have a webinar today at 4 p.m. http://bit.ly/1eoK4LY

MORE ON REAUTHORIZATION WISH LISTS — Inside Higher Ed has an in-depth look at how proposals from the major players, including higher education associations and advocacy groups, intersect and sometimes conflict. http://bit.ly/1c4EgeY

ELECTRONIC BENEFITS FIGHT KIDS’ HUNGER — Giving parents prepaid cards worth $60 in food benefits meant to help kids over the summer, when school meals always available, helped reduce hunger and increase the consumption of fruit, vegetables and whole grains. This was especially true if the program set limits on how the money could be used. SI&A Cabinet Report: http://bit.ly/14v9wkg

WHAT’S NEXT FOR KAPLAN — The Washington Post orphaned the education company that propped it up through tough times with the surprise sale to Amazon.com’s Jeff Bezos on Monday. The for-profit colleges and test prep company will remain part of a to-be-renamed, publicly traded Washington Post Co. with the other properties Bezos didn’t buy. Politico Pro on the rise and fall of Kaplan’s fortunes: http://politi.co/1eoJ4HU

HOW JUNK FOOD COMPANIES MARKET TO KIDS — The amount of money spent marketing food and drinks at schools dropped by about 24 percent from 2006 to 2009, and food companies spent less on marketing to kids in general. But in and out of school, kids are still flooded with food and drink marketing, a paper published today in the American Journal of Preventive Medicine says. It delved into a Federal Trade Commission study from last year on food marketing that targets children. The marketing includes sponsored incentives and fundraising activities, such as the General Mills Box Tops for Education program and Pizza Hut’s BOOK IT!; branded food sold in cafeterias and vending machines; and corporate logos on those snack machines and on scoreboards, book covers and team jerseys. Read the study: http://bit.ly/15Nwv71

Vending machines stay dark longer: Vending machines in Montgomery County Public Schools will stay turned off for 30 minutes after the end of the school day, the Washington Post reports. That will soon be a federal requirement too, but not until 2014-15: http://wapo.st/14v8NzI

WANT TO REDESIGN THE COLLEGE SCORECARD? — The Lumina Foundation is offering $10,000 for a redesign of the Obama administration’s “college scorecard.” The scorecard merited a mention in the State of the Union address in February, but got a tepid response from experts. Now the foundation is offering a prize the best mock-up of a new user experience: http://bit.ly/1eoJPk5

WHERE IN THE WORLD IS SECRETARY DUNCAN? — Giving a speech at USAID’s Education Summit on the importance of strengthening K-12 education to make the U.S. more competitive globally... and wrapping up “Let’s Read! Let’s Move!” for the summer with the hosts of “Property Brothers” on HGTV.

MORNING ED’S SYLLABUS

Live chat today at 10:30 a.m. with the president of Step Up For Students, which administers Florida’s tax-credit scholarships for low-income K-12 kids: http://bit.ly/14v96KI

A man who tried to scam the El Paso, Texas, district into a special education contract must pay the district about $3 million and spend three years in federal prison: http://1.usa.gov/194O47l

Sen. Barbara Mikulski (D-Md.) pushing for new commission on sexual assault at service academies: http://bo.st/14vaGw9

It's a cruel, cruel summer of nonstop education news, but the rest of the Pro Education team can make you feel better. Follow them: @ CaitlinZEmma, @ NirviShah and @ StephanieSimon_

Authors:

About The Author

Libby A. Nelson is an education reporter for POLITICO Pro and the author of Morning Education. Before joining POLITICO, she was a reporter at Inside Higher Ed, where she covered federal higher education policy – including Congress, the Education Department and higher education issues in the 2012 campaign -- and religious colleges. She got her start as an education reporter at the Chronicle of Higher Education, where she interned for nine months in 2009-10 and reported on federal policy, including sweeping student loan legislation included in the health care overhaul.

A 2009 graduate of Northwestern University, Nelson also interned on the metro desks of The New York Times, the St. Petersburg Times (now Tampa Bay Times) and the (Minneapolis) Star Tribune. Her first real job in journalism was in Scranton, Pa., where she worked as a regional reporter for the Times-Tribune. She grew up in suburban Kansas City and speaks fluent French.